tv Inside Story Al Jazeera December 4, 2013 11:30am-12:01pm EST
the u.s. economy is growing but so is the income gap between the rich and the pour. we are waiting for president obama to talk about changing that and other aspects of the economy. that is the woman that will be introducing him. and we'll have him in just a few moments. mike viqueira joins us for now with more on what to expect from the president. good morning. >> stephanie. good morning. as usual when it comes to politics and policy in washington, it is complicated. the president is trying to put forward his agenda for the state of the union speech and for the last three years of his presidency. he is going to take the populous
tack that we have seen before, and tie the affordable care act into all of it. he is going to be talking about minimum wage, and disparities in in income every growing in this country, and hearken back to past speeches he has made talking about making income distribution more quillable. and he had a lot of shoring up to do. this is a left-lanes think tank, the president going to the pourest region in terms of income in this city, ward 8, and he is going to be talking about empowering people who are economically disadvantaged and bringing them into the american dream. something he has talked about not a lot frefrequently. and he is also trying to turn the page from the bungled
healthcare rollout. and here is the president. [ applause ] >> thank you. thank you, everybody. please, please, have a seat. [ applause ] >> thank you so much. well, thank you ni ra for the wonderful introduction and sharing a story that resinated with me. there are were a lot of parallels in my life and probably resinated with some of you. in other the past ten years the center for american progress has done incredible work to shape the debate over expanding opportunity for all americans, and i could not be more grateful to cap not only for giving me a lot of good policy ideas, but also giving me a lot of staff. [ laughter ] >> my friend john ran my transition, my chief of staff dennis mcdunna did an extended
cap, so you are doing a good job training folks. i also want to thank all of the members of congress and my administration for the wonderful work they do. i want to thank mayor grey and everyone here at the ark for having me. this center which i have been to quite a bit, and all of the nonprofits that call the arc home offer access to everything from education to health care to a safe shelter from the streets, which means that your harnessing the power of community to expand opportunity for folks here in dc. and your work reflects a tradition that runs through our h history, the belief that we're greater together than we are on our own. and that's what i have come here to talk about today. over the last two months washington has been dominated by some fairly contention debates,
and between a reckless shoutdown by congressional republicans, and admittedly poor execution on my administration's part in implementing the latest stage of the new law, nobody has acquitted themselves very well these last few months, so it's not surprising that the american's people's frustrations with washington are at an all-time high. but we know the people's frustrations run deeper than these most recent political battles. the frustration is rooted in their own daily battles. to make ends meet, pay for college, buy a home, save for retirement. it's rooted in the nagging sense that no matter how hard they work the deck is stack against them, and it's rooted in the fear that their kids won't be better off than they were. they may not follow the constant
back and forth in washington or all of the policy details, but they experience in a very personal way the relentless decades-long trend that i want to spend some time talking about today. and that is a dangerous and growing inequality in lack of upward mobility. i believe this is the defining challenge of our time. making sure our economy works for every working american. that's why i ran for president. it was the center of last year's campaign. it drives everything i do in this office. and i know i have raised this issue before and some will ask why i raise the issue again right now. i do it because the outcomes of
the debates we're having right now, whether it's healthcare or the budget all of these things will have real practical applications for every american. and i am convinced the decisions we make over the next few years will determine whether or not our children will grow up in america where opportunity is real. now the -- the premise that we're all created equal is the opening line in the american story, and while we don't promise equal outcomes, we have strived to deliver equal opportunity. the idea that success doesn't depend on being born into wealth or pref, it depends on effort and merit. and with every chapter we have added to that story, we have
worked hard to put those words into practice. it was abraham lincoln, a self-described poor man's son who started the system of land grant colleges all over this country when farms gave way to factories, a rich man's son named teddy roosevelt fought for protections for workers and busted monopolies. when millions lived in poverty fdr fought for social security, and minimum wage. when millions died without health insurance, lbj fought for medicare and medicaid. together we have forged a new deal, declared a war on poverty in a great society, we built a ladder of opportunity, and stretched out a safety net
beneath so if we fell, we could bounce back, and as a result america built the largest middle class the world has ever known. and for the three decades after world war ii, it was the engine of our prosperity. we -- we can't look at the past through rose-colored glasses, the economy didn't always work for everyone. racial discrimination locked millions out of poverty -- or out of opportunity. women were too often confined to a handful of often poorly paid professions, and it was only through pain staking struggle that more women and mine nor advertise and americans with disabilities began to win the right to more fairly and fully participate in this the economy. nevertheless, during the post world war ii years, the economic ground felt stable and secure for most americans, and the future looked brighter than the
past. and for some that meant following in your old man's footsteps at the local plant, and you knew that a blue color job would let you buy a home, car, maybe a vacation once in a while, health care, and reliable pension. for others it meant going to college. in some cases maybe the first in your family to go to college. and it meant graduating without taking on loads of debt and being able to count on advancement through a vibrant job market. now it's true that those at the top even in those years claimed a much larger share of income than the rest, the top ten percent consistently took ohm about one-third of our national income. but that kind of inequality took place in a economy where everyone's wages and incomes were growing, and because of
upward mobility the guy on the factory floor could picture his kid running the company some day, but starting in this the '70s technology made it easier for companies to do more with less, eliminating certain job occupations. a more competitive world let companies ship jobs anywhere. and as good manufacturing jobs automated or headed offshore, workers lost their leverage, jobs paid less and offered fewer benefits. as values of community broke down andment competitive pressure increased businesses lobbied washington to weaken unions and the value of the minimum wage. as a trickle-down ideology became more prominent, taxes
were slashed for the wealthiest, while investments that make us all richer, like schools and infrastructure, were allowed to wither. and for a certain period of time we could ignore this weaken economic foundation, in part because more families were relying on two earners as women entered the work force. we took on more debt. but when the music stopped and the crisis hit millions of families were stripped of whatever cushion they had left. as the result is an economy that has become profoundly inequal, and families that are more insecure. since 1979 when i graduated from high school, our productivity is up by more than 90%. but the income of the typical
family has increased by less than 8%. since 1979 our economy has more than doubled in size. but most of that growth has flowed to a fortunate few. the top 10% no longer takes in one-third of our income. it now takes half. whereas in the past the average ceo made about 20 to 30 times the income of the average worker, today's ceo now makes 273 times more. and meanwhile the family in the top 1% has a net worth 288 times hire -- higher than the typical family which is a record for this country. so the heart of our economy has frayed. in fact this trend towards growing inequality is not unique to america's market economy, acrossed the developed world,
inkwee allty has increased. some -- some of you may have seen just last week, the pope himself spoke about this at eloquent length. how can it be, he wrote, that it's not a news item when an elderly homeless item dies of exposure, but it is when the stock market loses two points? but this increasing inequality is most pronounced in our country, and it challenges the very essence of who we are as a people. understand, we have never begrudged success in america. we aspire to it. we admire folks who start new businesses, create jobs and invent the products that enrich our lives, and we expect them to be rewarded handsomely for it. in fact we have often accepted more income inequality than many
other nations for one big reason. because we were convinced that america was a place where even if you are born with knowing, you can build something better to leave your kids. as lincoln once said, while we do not propose any war upon capital, we do wish the humblest man to get rich with everybody else. the problem is we have seen diminished levels of upward mobility in recent years. a child born in the top 20% has about a 2 in 3 chance of staying at or near the top. a child born into the bottom 20%, has a less than 20 chance shot of making it to the top. he is ten times more likely to
stay where he is. and our levels of inequality rank near countries like jamaica and argentina, but it is harder for a chiel -- child born here in america to improve her life than it is in countries like germany, and england, and france. the idea that so many people are born into poverty in the wealthiest nation on earth heart breaking enough. but the idea that a child may never be able to escape that poverty because she lacks a decent education or health care, that should offend all of us, and it should compel us to action. we are a better country than this. the combined trends of increased
inequality and decreasing mobility pose a fundamental threat to the american dream, our way of life and what we stand for around the globe. there are practical consequences to rising inequality and reduced mobility. these trends are bad for our economy. one study finds that growth is more fragile and recessions are more frequent in countries with greater inequality. and that makes sense. when families have less to spend that means businesses have fewer customers. and households rack up greater mortgage and credit card debt. meanwhile concentrated wealth at the top is less likely to result in the broodly based consumer spending that drives our economy. rising inequality and declining
mobility are also bad for our families and social cohesion, not just because we tend to trust our institutions less, but studies show we actually tend to trust each other less when there's greater inequality. and greater inequality is associated with less mobility between generations. that means the effects last. it creates a vicious cycle. for example, by the time she turns three years old, a child born into a low-income home hears 30 million fewer words than a child from well-off family. which means by the time she starts school she is already behind and that deficit can compound itself over time. and finally, rising inequality and declining mobility are bad for our democracy.
ordinary folks can't write massive campaign checks to tilt policies in their favor at everyone else's expense. so people get the bad taste that the system is rigged, and that increases cynicism and polarization, and decreased the political participation. so this is an issue that we have to tackle head on, and if in fact the majority of americans agree that our number one priority is to restore opportunity and brood based growth for all americans the question is why has washington consistently failed to act? i think a big reason is the myths that have developed around the issue of inequality.
first there's the myth that this is a problem restricted to a small share of predominant minority poor. this is a black problem or hispanic problem ornatetive american problem. now it's true that the painful legacy of discrimination means that african-americans, latinos, native americans are far more likely to suffer from lack of opportunity. higher unemployment, higher poverty rates. it's also true that women still make $0.77 on the dollar compared to men. so we're going to need strong application of anti-discrimination laws, we need immigration reform that gross the any and takes people out of the shadows. we're going to need targeted initiatives to close those gaps.
[ applause ] >> but -- but here is an important point, the decade's long shifts in the economy have hurt all groups, poor and middle class inner city and rural folks, men and women, and americans of all races, and as a consequence some of the social patterns that contribute to declining mobility, that were once attributed to the urban poor, that's a particular problem for the inner city. single parent households or you know drug abuse or -- it turns out now we're seeing that pop up everywhere. a new study shows that disparities in education, mental health, obesity, absent fathers, isolation from church, isolation from community groups, these gaps are now as much about
growing up rich or poor as they are about anything else. the gap in test scores between poor kids and wealthy kids is now at nearly twice what it is between white kids and black kids. kids with working class parents are ten times likelier than kids with middle or upper class parents to go through a time when their parents have no income. the fact is this, the opportunity gap in america is now as much about class as it is about race, and that gap is growing. so if we're going to take on growing inequality and try to improve upward mobility for all people we have move beyond the false issue that this is an issue exclusively of minority concern. and reject politics that pits the interests of a deserving
middle class against those of undeserving poor in this search of handouts. [ applause ] second, we need to dispel the smith -- myth that growing the economy are in conflict. our economy growths best from the middle out. and beyond a certain level of inequality, growth actually slows all together. third, we need to set aside the belief that government cannot do anything about reducing inequality. it's true that government cannot prevent all of the down sides of the tech lolg call change that
are out there now, and some of those forces are also some of the things that are helping us grow. and some programs in the past were sometimes poorly designed. created disincentives to work. but we have also seen how government action time and again can make an enormous difference in increasing opportunity and bolstering ladders into the middle class. investments in in education. laws establishing collective bargaining and a minimum wage. [ applause ] >> these all contributed to rising standards of living for massive numbers of americans. likewise when previous generations declared that every citizen of this country deserved a basic measure of security, the floor through which they could not fall, we helped millions of americans live in dignity and gave millions more the confidence to aspire to something better by taking a risk on a great idea.
and without social security nearly half of seniors would be living in poverty. half. today fewer than one in ten do. before medicare, only half of all seniors had some form of health insurance. today virtually all do. and because we have strengthened that safety net and expanded prowork and pro family initiatives the poverty rate has fallen like 40% since the 1960s. and this reaffirmed that we are a great country. so we can make a difference on this. in fact that's our generation's task to rebuild america's economic and civic foundation to continue opportunity for this generation and the next generation.
[ applause ] >> and like . . . and like mira, i take this personally. i am only hear because this country educated my grandfather on the gi bill when my father left and my mom hit hard times trying to raise my sister and me while she was going to school, this country help make sure we didn't go hungry. when michelle wanted to go to college, just like me, this country helped us afford it until we could pay it back. so what drives me is a grandson, a son, a father. as an american is to make sure that every striving hardworking optimistic kid in in america has the same incredible chance that this country gave me. [ applause ]
>> it has been the drives force between everything we have done this past five years, and for the rest of my presidency, that's where you should expect my administration to focus all of our efforts. [ applause ] >> now, you'll be pleased to note this is not a state of the union address. [ laughter ] >> and many of the ideas that could make the biggest difference in expanding opportunity, i have offered before. but let me provide a few key principles. we have to continue to relentlessly push a growth agenda. and it may be true that in today's economy growth alone
does not guarantee higher wages and incomes. we have seen that. but we can't tackle inequality if the economic pie is shrinking or stagnant. if you are a progressive and you want to help the middle class and working poor, you have still got to be concerned about competitiveness, and productivity, and business confidence that spurs private sector investment. and that's why from day one we worked to get our economy growing and helped our businesses higher. and they have created nearly 8 million new jobs over the past 44 months. and now we have grow the economy even faster, and keep working to make america a magnet for good middle classed jobs to replace the ones we have lost in the past decades. that means simplifying our corporate tax code in a way that closes wasteful loopholes and ends incentives to ship jobs
overseas. [ applause ] >> we can -- by broadening the base we can lower rates to encourage more companies to higher here, and rebuild our roads and bridges and airports and all of the structure our businesses need. it means a trade agenda that grows exports and works for the middle class. it means streamlining regulations that are outdated or too costly, and coming together around a responsible budge. one that grows our economy faster now, and shrinks our long-term deficits one that unwinds the harmful sequester cuts -- [ applause ] >> and frees up resources to invest in areas like scientific
research. a relentlessly growing deficit of opportunity is a bigger threat to our future than our rapidly shrinking fiscal deficit. [ applause ] >> so that's step one towards restoring mobility. making sure our economy is growing faster. step two is making sure we empower more americans with the skills and education they need to compete in a highly competitive global economy. we know that education is the most important predictor of income today. so we launched a race to the top in our schools. we're supporting states that have raised standards for teaching and learning, we're pushing for redesigned high schools that graduate kids with in demand high-tech skills.
we know it's harder to find a job today without some higher education, so we have helped more students go to college with grants and loans that go father than before. we have made it more practical to repay those loans. we're also pursuing an aggressive strategy to promote innovation that reigns in tuition costs. we have got to lower costs so that young people are not burdened by enormous debt when they make the right decision to get higher education. and next week michelle and i will bring together college presidents and nonprofits to help more low-incoming students attend and succeed in college. [ applause ] >> but while -- while higher education may be the surest path to the middle class, it's not the only one. we should offer our people the best technical education in